Hi would someone be able to explain to me why the question in the attached screenshots is not “Preferred Stock”?
Hi, preferred stock certainly generates income in the form of dividends. Although dividends are not legally guaranteed obligations of the issuer, some preferred stocks make significant, high-yield payments.
Growth stocks typically use their earnings to grow the company rather than paying dividends. They’re suitable for investors looking for capital appreciation, not income.
it’s asking for “least” suitable. Preferred stock offers income (dividends) so that’s a definite no. They are trying to trick the question by talking about high yield but it’s not the key point. Growth stocks are never in the same bucket as INCOME so that’s the most wrong answer of the group. Oftentimes you will find other wrong answer (like corp bonds)…but need to find the most wrong one. Hope that helps.